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California Outdoor Equity Partners v. City of Corona

United States District Court, C.D. California

July 9, 2015

CALIFORNIA OUTDOOR EQUITY PARTNERS; and AMG OUTDOOR ADVERTISING, INC., Plaintiffs,
v.
CITY OF CORONA, a California Municipal Corporation Defendants.

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS/STAY; DENYING MOTION FOR PRELIMINARY INJUNCTION

MARGARET M. MORROW, District Judge.

On April 28, 2015, California Outdoor Equity Partners ("COEP") and AMG Outdoor Advertising, Inc. ("AMG") (collectively, "plaintiffs") filed this action against the City of Corona ("the City") and various fictitious defendants.[1] The claims concern allegedly unequal enforcement of a ban on off-site commercial billboards in the City that is purportedly unconstitutional on its face.

On April 30, 2015, plaintiffs filed a motion for preliminary injunction, which they noticed for hearing on July 6, 2015.[2] On May 21, 2015, plaintiffs filed an ex parte application for temporary restraining order, [3] which the court denied, finding that plaintiffs had failed to show a likelihood of success on the merits of their claims.[4] Also on May 21, 2015, the City filed a motion to dismiss.[5] Both the motion to dismiss and the motion for preliminary injunction are opposed.[6]

I. FACTUAL BACKGROUND

A. Facts Alleged in the Complaint

The City of Corona Municipal Code § 17.74.160 prohibits the construction or operation of outdoor, off-site, commercial signs, i.e., billboards.[7] The ban does not apply to on-site commercial billboards, or to noncommercial billboards.[8] Section 17.74.070(H) provides for the relocation of previously existing off-site, commercial billboards. Specifically, it states: "[N]ew off-premises advertising displays... may be considered and constructed as part of a relocation agreement requested by the city or redevelopment agency and entered into between the city or redevelopment agency and a billboard and/or property owner.... Such agreements may be approved by the City Council upon terms that are agreeable to the city and/or redevelopment agency in their sole and absolute discretion."[9]

Plaintiffs allege that the City's ban on off-site, commercial billboards violates the First Amendment and the free speech clause of the California constitution because it is an impermissible content-based regulation of free speech.[10] They also contend that § 17.74.070(H) is invalid as a prior restraint on free speech, given that it vests the City Council with unfettered discretion to approve relocation of preexisting off-site commercial billboards. Finally, they assert that even if the ban is constitutional, it is being applied in a discriminatory manner in violation of the equal protection clause set forth in Article 1, Section 7 of the California constitution, because the City is permitting Lamar Advertising Company ("Lamar") to build new billboards while denying them the right to do so.[11]

B. The State Court Proceedings

On December 30, 2014, the City filed a nuisance abatement action in Riverside Superior Court against AMG and other non-parties, alleging, inter alia, claims for public nuisance arising out of the state court defendants' violation of the City's ban on off-site commercial billboards.[12] On January 7, 2015, the superior court granted the City's application for temporary restraining order. The state court defendants sought a writ of mandate vacating the temporary restraining order; their petition was summarily denied by the California Court of Appeal.[13] On January 23, 2015, the superior court issued a preliminary injunction in favor of the City, [14] which is the subject of a pending appeal.[15] Although the initial complaint named only AMG and various other individuals and entities that are not parties to this action, COEP was added as a party in the first amended complaint, filed May 18, 2015.[16]

II. DISCUSSION

A. The City's Request for Judicial Notice

The City asks the court to take judicial notice of certain portions of its Municipal Code, as well as the docket and various court filings in the pending state court action against plaintiffs.[17] Plaintiffs do not oppose the request. Because Rule 12(b)(6) review is confined to the complaint, the court typically does not consider material outside the pleadings (e.g., facts presented in briefs, affidavits, or discovery materials) in deciding such a motion. In re American Continental Corp./Lincoln Sav. & Loan Securities Litig., 102 F.3d 1524, 1537 (9th Cir. 1996). It may, however, properly consider exhibits attached to the complaint and documents whose contents are alleged in the complaint but not attached, if their authenticity is not questioned. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001).

In addition, the court can consider matters that are proper subjects of judicial notice under Rule 201 of the Federal Rules of Evidence. Id. at 688-89; Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds by Galbraith v. County of Santa Clara, 307 F.3d 1119 (9th Cir. 2002); Hal Roach Studios, Inc. v. Richard Feiner and Co., Inc., 896 F.2d 1542, 1555 n. 19 (9th Cir. 1990); see also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007) ("[C]ourts must consider the complaint in its entirety, as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice").[18] The court is "not required to accept as true conclusory allegations which are contradicted by documents referred to in the complaint." Steckman v. Hart Brewing Inc., 143 F.3d 1293, 1295 (9th Cir. 1998).

The City asks that the court take judicial notice of six documents filed in the state court action, as well as the docket in that case.[19] These documents bear directly on whether the court can properly exercise jurisdiction in this case. It is well established that federal courts may take judicial notice of state court orders and proceedings when they bear on the federal action. See Dawson v. Mahoney, 451 F.3d 550, 551 (9th Cir. 2006) (taking judicial notice of state court orders and proceedings); see also United States v. Black, 482 F.3d 1035, 1041 (9th Cir. 2007) (stating that an appellate court "may take notice of proceedings in other courts, both within and without the federal judicial system, if those proceedings have a direct relation to matters at issue"); ScripsAmerica, Inc. v. Ironridge Global LLC, 56 F.Supp.3d 1121, 1136 (C.D. Cal. 2014) ("It is well established that federal courts may take judicial notice of related state court orders and proceedings.").

The City also requests that the court notice certain relevant portions of the municipal code. Under Rule 201, municipal ordinances are proper subjects of judicial notice because they are not subject to reasonable dispute. See Tollis, Inc. v. County of San Diego, 505 F.3d 935, 938 n. 1 (9th Cir. 2007) ("Municipal ordinances are proper subjects for judicial notice"); Engine Mfrs. Ass'n v. South Coast Air Quality Management Dist., 498 F.3d 1031, 1039 n. 2 (9th Cir. 2007) (taking judicial notice of a municipal ordinance and stating that "[m]unicipal ordinances are proper subjects for judicial notice"); Santa Monica Food Not Bombs v. City of Santa Monica, 450 F.3d 1022, 1025 n. 2 (9th Cir. 2006) (taking judicial notice of Santa Monica Ordinances Nos. 2116 and 2117). The court accordingly takes judicial notice of the various sections of the Corona Municipal Code that are the subject of the City's judicial notice request.

B. Legal Standard Governing Motions to Dismiss under Rule 12(b)(6)

A Rule 12(b)(6) motion tests the legal sufficiency of the claims asserted in the complaint. A Rule 12(b)(6) dismissal is proper only where there is either a "lack of a cognizable legal theory, " or "the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). The court must accept all factual allegations pleaded in the complaint as true, and construe them and draw all reasonable inferences from them in favor of the ...


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